China Escalates Crackdown on Cross-border Financial Activities

Eight Regulators Launch Coordinated Enforcement Framework

On 22 May 2026, the China Securities Regulatory Commission (“CSRC”), together with seven other PRC authorities, jointly issued the Implementation Plan for the Comprehensive Rectification of Illegal Cross-border Securities, Futures and Fund Business Activities (the “Implementation Plan”)¹, following approval by the State Council.

The Implementation Plan represents a significant escalation in China's regulatory approach to unauthorised cross-border securities, futures and fund activities involving PRC investors. While PRC regulators have long maintained that overseas financial institutions may not conduct regulated business activities in the PRC without the requisite approvals, the new framework introduces a more coordinated and enforcement-focused regime involving securities, banking, foreign exchange, cybersecurity and criminal enforcement authorities.

The Implementation Plan contemplates a two-year concentrated campaign aimed at comprehensively rectifying illegal cross-border securities, futures and fund business activities conducted by overseas institutions in the PRC, with the stated objective of “firmly suppressing illegal activities while orderly disposing of existing business”.

Parallel Enforcement Actions

The release of the Implementation Plan was accompanied by CSRC announcements concerning enforcement actions against Tiger Brokers (NZ), Futu Securities International (Hong Kong) and Longbridge Securities (Hong Kong) for alleged unauthorised securities brokerage and related activities involving PRC investors.²

Importantly, this is not the first time the CSRC has taken action against Futu and Tiger in relation to cross-border business involving PRC investors. In 2021 and 2022, CSRC issued public condemnations and rectification orders against the same entities, though those measures were comparatively less severe.³

The latest investigations and proposed penalties, together with the Implementation Plan, therefore appear to represent a continuation and escalation of an existing regulatory approach rather than a departure from prior policy.

Key Takeaways

For those targeting eligible PRC investors — including sovereign wealth funds (SWFs), QDIIs, and institutions relying on established market access regimes such as Mutual Fund Recognition, Bond Connect or GBA Wealth Management Connect — business may largely continue as usual, as these groups are not the focus of enforcement. By contrast, firms with investors who are PRC nationals must exercise greater care in client onboarding and business acceptance, ensuring robust documentation to demonstrate the legitimacy of funds (e.g., derived from employment or overseas business). More importantly, marketing activities conducted within the PRC are now subject to closer scrutiny and may be deemed unlawful if directed at non‑eligible PRC investors or carried out without proper authorisation.

Scope of Target Activities

The Implementation Plan adopts a broad enforcement perimeter covering:

• Overseas institutions engaging in unauthorised cross-border securities, futures or fund business (“Overseas Institutions”) with PRC investors — In the PRC legal context, this may capture securities brokers, futures brokers, fund distributors, and fund managers who market brokerage services or fund products to PRC investors without relying on a legitimate access route;
• PRC affiliates or cooperation partners assisting such activities;
• Intermediaries soliciting or guiding PRC investors to open overseas trading accounts for profit; and
• Internet platforms and online self-media channels facilitating marketing, account opening or related services.

Importantly, the Implementation Plan reiterates the regulators’ position that an Overseas Institution engaging in securities, futures or fund business activities in the PRC without CSRC approval constitutes illegal business operation, whether conducted directly or indirectly through affiliates or cooperation arrangements.

The Implementation Plan also extends beyond securities regulation and expressly incorporates breaches relating to foreign exchange administration, anti-money laundering requirements, cybersecurity, information management and personal data protection.

Prohibited Conduct

The Implementation Plan adopts an end-to-end regulatory approach, covering the full business chain of cross-border financial services.

The Implementation Plan prohibits Overseas Institutions from carrying out the following in the PRC:

• unauthorised marketing or solicitation of securities, futures or fund business within the PRC. This includes operating websites or trading apps in China, publishing promotional materials, pushing investment information, offering rebate campaigns, promoting or inducing investment in overseas securities, and similar activities. Internet platforms are barred from facilitating such cross‑border business by providing marketing channels, account‑opening links, or other conveniences. Self‑media accounts are likewise prohibited from posting promotional or referral content in China.
• unauthorised trading services within the PRC, such as account opening, processing trade instructions or fund transfers. This prohibition extends to cross‑border acceptance and transmission of account applications or trade instructions via websites, apps, or servers.

PRC entities are prohibited from supporting such activities including website or app development and operation, customer service, or other facilitation of unauthorised cross‑border business.

Legacy Accounts and Existing Investors

A notable feature of the Implementation Plan is the introduction of a two-year rectification period for existing business.

During this period, Overseas Institutions may not provide new purchase or inbound funding services to existing PRC investors. Only one-way sell transactions and outbound fund withdrawals will be permitted.

Following expiry of the rectification period, Overseas Institutions are expected to shut down PRC-facing websites, trading applications and related services and cease providing illegal trading services to PRC investors.

Why This Matters

The Implementation Plan does not introduce an entirely new regulatory principle. PRC regulators have consistently taken the position that Overseas Institutions may not conduct securities, futures or fund business in the PRC without approval.

What appears to have changed is the intensity and coordination of enforcement. The new framework targets not only Overseas Institutions themselves, but also the broader ecosystem supporting cross-border activities, including domestic partners, internet platforms, banks and service providers.

Overseas Institutions and related service providers with PRC-facing business models should therefore consider reviewing their distribution arrangements, marketing practices, client onboarding processes and operational infrastructure to assess potential PRC regulatory exposure.

At the same time, the authorities continue to distinguish between illegal cross-border activities and authorised outbound investment channels and have reiterated that PRC investors should access overseas investment opportunities through approved mechanisms such as Stock Connect, QDII and GBA Wealth Management Connect.

Should you have any questions or require further assistance regarding any of the above, please do not hesitate to Melody Yang and Sherry Si at YaoWang Law Offices (our strategic alliance firm in China Mainland).

^{1Please refer to: 中国证监会 工业和信息化部 公安部 中国人民银行 市场监管总局 金融监管总局 国家网信办 国家外汇局关于印发《综合整治非法跨境证券期货基金经营活动实施方案》的通知_中国证券监督管理委员会
2Please refer to: 证监会严肃查处老虎等机构非法跨境展业案件_中国证券监督管理委员会
3Please refer to: 中国证监会推进富途控股、老虎证券非法跨境展业整治工作_中国证券监督管理委员会}